FX.co ★ Treasury Yields Rise for 2nd Session

The yield on the US 10-year Treasury note climbed nearly 2 basis points to 4.08% on Wednesday, its first consecutive increase since the beginning of the month, as investors weighed robust economic data ahead of the FOMC minutes release later in the day. December housing starts and building permits both surpassed expectations, pointing to improving builder confidence at year-end. At the same time, durable goods orders declined by less than forecast, while core capital goods orders rose a stronger-than-expected 0.6%. Investors are also awaiting the minutes from the Fed’s January meeting for additional guidance after policymakers adopted a more hawkish tone. Money markets now imply 57 basis points of rate cuts for the year, effectively two quarter-point reductions and about a 30% probability of a third.